Tips for First Time Home Buyers

It is one of the biggest steps you will take in your life—homeownership. Buying is an exciting step in your financial future. There will be a lot of growth and learning throughout the process, but if you want to make the adventure a little smoother keep reading for some great tips that are sure to make the process less stressful.

Research, Research, Research!

We live in an age of technology, and the answer to almost any question you might have you can probably find in an instant online. Which is why, the first tip for first time and future home buyers is to do your research! You want to know how much you can afford to spend before a loan officer tells you how much you qualify for. Why? You want your investment to be a sound one, made with premeditation and an understanding of your buying power. If you are barely starting out, research can help you determine what you need to do now to purchase a home in the future, in essence research can help you create a home buying blue print for yourself. A few good places to start are Bankrate.com, Trulia.com, and Zillow.com

Stay on Top of Your Credit

Sure, everyone knows that having a higher credit score is a good thing. But when it comes to purchasing a home, are you aware why a higher credit score is better? The fact is that all mortgage lending is based on a tier of interest rates and terms which are all centered on credit scores; the higher the credit score, the better the tier and vise-versa.

Since credit is such a huge factor in buying a home, monitoring your credit is vital. Monitoring your credit shouldn't only be a priority when you are thinking about purchasing a home, overseeing your credit is something that should be done as soon as you start using and building your credit. You want to make sure that everything on your credit report belongs to you and installment payments have no lates.

Bonus tip: Did you know you can access your credit report free once a year? Visit: Annual Credit Report

Assets & Liabilities

Assets are another important aspect of purchasing a home. It's all about understanding your monthly cash flow. Lenders will focus on how you spend your money, focusing on how much money you have left over every month based on your debt–to–income ratio. Learn more about debt-to-income.

Paper Organization

Sometimes the home buying process is delayed for less obvious reasons. If you do your research mentioned in tip one, you will likely find that lenders ask for proof of income and taxes. Having this documentation on hand can make the process a lot smoother and stress free. A good rule of thumb is to save 2 months' worth of bank statements, paystubs, and 2 years of tax returns and w-2s in an easily accessible place (for you). Make sure you update your bank statements and paystubs every 2 months and your taxes and w-2s every year.

Get Pre-Qualified

After following the above tips, your next most important step before thinking about purchasing a home, is finding a lender to pre-qualify with. It's never too early to consult a lender. Think about it, if you need to make any corrections on your credit report, or gather a little more money for the down payment you want to make sure you aren't pressured or running against the clock to work out any kinks. Getting pre-qualified lets you and home sellers for that matter; know that you are serious buyer with real numbers and figures, not a lookie-loo.

Whether you are looking forward to, thinking of starting, or in the process of purchasing your first home, remember that research is a powerful tool, and you can never know too much or learn everything there is to know. So find all the resources you can and educate yourself, by doing so you are building a smooth bridge to home ownership.

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*14 business day guarantee only applies to purchase transactions. This guarantee does not apply to Reverse Mortgages, FHA 203k, VA, Bond, MCC, loans that require prior approval from an investor, or brokered loans. The guarantee does not apply if events occur beyond the control of New American Funding, including but not limited to; appraised value, escrow or title delays, 2nd lien holder approval, short sale approval, or lender conditions that cannot be met by any party. The 14 business day trigger begins when the borrower’s initial application package is complete and the borrower has authorized credit card payment for the appraisal. If New American Funding fails to perform otherwise, a credit of $250 will be applied toward closing costs.